Sunday, January 21, 2007


From a recent post on the forums regarding the sq/vol/br or the Volatility Breakout as John Bollinger describes it.

1/21/2007 12:59:32 PM

This from:

"Now, for Method I. Years ago the late Bruce Babcock of Commodity Traders Consumers Review interviewed me for that publication. After the interview we chatted for a while--the interviewing gradually reversed--and it came out that his favorite commodity trading approach was the volatility breakout. I could hardly believe my ears. Here is the fellow who had examined more trading systems--and done so rigorously--than anyone with the possible exception of John Hill of Futures Truth and he was saying that his approach of choice to trading was the volatility-breakout system? The very approach that I thought best for trading after a lot of investigation?"

Just what I've been saying for years.

Also this:
"Perhaps the most elegant direct application of Bollinger Bands is a volatility breakout system."
Our version of the venerable volatility breakout system utilizes BandWidth to set the precondition and then takes a position when a breakout occurs."

And what i've always STRONGLY believed:
"Most often this will occur within the bands and you won't get a breakout signal until after the real move is under way."
Note the word "AFTER"

Look at a 3 month chart of LTS, it's the "hot" stock on the message boards NOW.
But myself and the few others I trade with picked it up on 1/8 when it broke the "squeeze" on HUGE volume and white candle being pierced by the UBB.
Factors I've mentioned for years here on the forums.

I'd hate to see this thread die but with ALL DUE RESPECT the last 2 filters posted here show no squeeze in progress on almost all the matches it picks up.
I charted 4 stocks I know from both filters.
From the first ESLR WTSLA ENER DPTR, the second CPST MOT XTO CDE (bands way wide on this?)
The few that are semi-squeezes you'll maybe wait weeks for a validation of a squeeze/break IF EVER.
IMO,Such a waste of time and effort tracking these when you can find ones(and do your DD) the night of the squeeze/break.

Why not get the patterns of a REAL squeeze and wait for the first breakout to occur?

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